Climate change funds to outperform
Over 40% of global fund managers believe that climate change will be the outperforming environmental, social, and governance (ESG) theme over the next 12 months, and only two climate related funds have managed to make a return so far this year.
Bank of America (BofA) data said innovation would the second ESG theme to outperform, followed by health and safety, and corporate governance.
According top FE Analytics, within the Australian Core Strategies universe, there were seven equity funds focused on climate change.
Only two so far this year have managed to make a return, and another two only launched this year.
The top performing fund was AtlasTrend Clean Disruption at 8.65%, followed by BNP Paribas Environmental Equity Trust at 0.52%.
State Street International Equities Index Trust Low Carbon ESG lost 1.8%, and this was followed by Russell Investments Low Carbon Global Shares at a loss of 1.82%, and Russell Investments Low Carbon Australian Shares A at a loss of 9.77%.
The other two funds, Fidelity Sustainable Water and Waste and Future Renewables fund were both launched this year in January and June respectively.
Performance of climate-focused funds since start of 2020 to 31 July 2020
Source: FE Analytics
The AtlasTrend fund was the only fund to recover losses from the March sell-off induced by the COVID-19 pandemic. The fund said it invested in clean disruption of energy in areas such as energy storage, transportation, infrastructure, manufacturing, building materials and lighting, and recycling and waste management.
Looking over the longer term, the top-performing fund was again the AtlasTrend fund at 22.75% over the two years to 31 July, 2020, as most of the funds were launched after 2018.
The State Street fund followed at 18.2%, Russell Investments Low Carbon Global Shares at 16.64%, and BNP Paribas Environmental Equity Trust at 16.56%.
Performance of climate-focused funds over two years to 31 July 2020
Source: FE Analytics
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